The latest Market Talks covering Equities. Published exclusively on Dow Jones Newswires throughout the day.
0317 GMT - Malaysia's benchmark Kuala Lumpur Composite Index's recent declines reflect persistent foreign fund outflows, FSMOne research assistant manager Alwyn Chew Chuan Shyn says in a note. Renewed weakness in Wall Street technology stocks amid a rotation away from AI-related stocks may have added to the pressure, he reckons. External factors are likely to drive near-term market volatility, particularly the coming U.S. midterm elections and the Fed rate decisions in October and December, he says. Export-oriented stocks may remain under pressure, while domestic-focused banks and utilities could offer greater resilience. The prolonged selloff since September has also created attractive entry points, with financial stocks standing out for their defensive qualities and appealing dividend yields, he adds. The KLCI falls 0.1% to 1597.93. (yingxian.wong@wsj.com)
0314 GMT - Ardentec's earnings stand to benefit from better-than-expected networking demand, say Daiwa Capital Markets analysts in a research report. Daiwa's industry checks indicate that demand for networking products is surging across the testing supply chain, mainly fueled by the acceleration of 1.6-terabit networking adoption. As these high-speed networking programs mostly follow a customer-consignment model, their rising revenue mix should offer upside to the Taiwanese wafer-testing provider's overall gross margin. The brokerage lifts its 2027-2028 EPS estimates for Ardentec by 7%. It raises the stock's target price to 395.00 New Taiwan dollars from NT$340.00 with an unchanged buy rating. Shares are 1.4% lower at NT$254.50. (ronnie.harui@wsj.com)
0302 GMT - Investors are likely underestimating artificial-intelligence profitability across the supply chain, Nomura analysts say in a research note. Losses at select AI labs and neoclouds have contributed to a broader perception that AI investment is unprofitable, they say. Rapid growth requires investment in computing capacity before the associated revenue streams fully mature, creating a cashflow mismatch, they say. This timing gap and losses at selected companies are distorting perceptions of the broader AI profit pool, the analysts note. Sustained utilization and pricing remain important to returns on incremental capital, they say. Meanwhile, established cloud platforms such as AWS and Microsoft remain highly profitable, they add. (sherry.qin@wsj.com)
0224 GMT - Press Metal Aluminium's recent share-price weakness could reflect concerns over Indonesian market uncertainty, temporary power curtailments and softer aluminum demand, Citi analyst Ryan Davis says in a note. The most immediate risk is reduced power supply, which could lower annual output by 0.75% and net profit by about 1.4% if it lasts a quarter, although additional scrap use may limit the impact, he says. While slower Chinese demand and higher interest rates could weigh on aluminum prices in near term, Davis remains cautiously positive on the metal into 2027, supported by low inventories and demand from electrification, AI and power infrastructure. Citi has a buy rating on Press Metal with a target price of 10.60 ringgit. Shares are 0.9% higher at 6.74 ringgit.(yingxian.wong@wsj.com)
0213 GMT - Singapore Exchange faces an earnings hit from likely lower trading volumes, RHB Research's Shekhar Jaiswal says in a report. SGX's securities turnover and securities daily average value fell on-month in September, the analyst notes. Its implied 1H FY 2027 securities and derivatives activities track 7.4% and 10.2%, respectively, below RHB's forecasts. RHB cuts its earnings estimates for SGX by 8.3% for FY 2027, 8.4% for FY 2028, and 8.5% for FY 2029. RHB lowers the stock's target price to 20.30 Singapore dollars from S$22.20. However, SGX's valuation premium to regional peers remains defensible partly thanks to Singapore's structural tailwinds, RHB says, maintaining its neutral rating. Shares are 0.2% lower at S$20.73. (ronnie.harui@wsj.com)
0145 GMT - The decision by National Australia Bank to cut 2,500 jobs should prompt serious questions about how much work will be handed to artificial intelligence, and what level of human oversight will remain, says Helen Bird, governance expert at Swinburne University. The size of the staff reduction suggests something ominous, she adds. What isn't being talked about is the use of technology, including AI, to replace staff involved in administrative, monitoring and oversight functions. This is no doubt an early example of the large-scale employment cuts likely in the coming years, she says. Transparency in this space is critical, she adds. (james.glynn@wsj.com; @JamesGlynnWSJ)
0128 GMT - The global investment community appears likely to circle the wagons over coming weeks as risk factors escalate. Technology stocks are set to report profits, and any misstep could trigger shock waves, ANZ says in a note to clients. Energy prices also remain elevated as tensions in the Middle East escalate, maintaining pressure on central banks to hike. Sovereign debt concerns have resurfaced amid riots across France, it adds. Meanwhile U.S. fiscal metrics continue to deteriorate, with net interest payments exceeding 1 trillion U.S. dollars per year. The U.S. midterm elections are likely to increase the risk of policy deadlock, it adds. (james.glynn@wsj.com; @JamesGlynnWSJ)
0124 GMT - Malaysia tech companies' 3Q results season is expected to resemble the previous quarter's, with strong fundamentals and robust demand supporting earnings, Hong Leong Investment Bank analyst Toh Woo Kim says in a note. Demand is supported by AI investment, China+1 diversification, supply-chain localization and new customer wins, he says. However, higher bond yields, elevated oil prices and a hawkish U.S. Fed outlook could keep markets volatile, as seen last quarter when technology stocks fell despite strong results from major technology and semiconductor companies, he reckons. Toh recommends using market pullbacks to accumulate quality stocks with solid earnings visibility and potential for upward earnings revisions. Hong Leong maintains an overweight rating on the Malaysian tech sector, pegging Vitrox, UWC, SAM Engineering & Equipment (M) and Itmax System as its top picks. (yingxian.wong@wsj.com)
0107 GMT - IHH Healthcare's ambulatory care center expansion in Malaysia is expected to support growth through higher patient turnover and better use of existing facilities, CIMB Securities analyst Chun Sung Oong says in a note. The planned acquisition of Afiniti Wellness in Johor will expand Gleneagles Hospital Medini's outpatient services and free up hospital capacity for more complex cases, he reckons. The acquisition value wasn't disclosed, but he views the acquisition positively. Day-care patients can be treated at least three times faster than in-patients, improving operating efficiency despite generating 40%-50% less revenue per case, he adds. CIMB maintains a buy rating on IHH and keeps its target price at 10.30 ringgit. Shares are 1.3% higher at 8.00 ringgit. (yingxian.wong@wsj.com)
0103 GMT - Australian banks face a tough business environment over the next year as loan growth dries up. Credit growth has held up so far in the face of four interest rate increases, but support is fading, says BMI in a report on the sector. The slowdown should show up first and most strongly in mortgage lending, it adds. Loans settling in mid-2026 largely reflect applications and preapprovals from earlier in the year, before most of the tightening had taken effect, so the slowdown in new lending has yet to feed fully into the headline figure, BMI adds. (james.glynn@wsj.com; @JamesGlynnWSJ)
0022 GMT - The Nikkei Stock Average falls 0.7% to 64480.14 amid lingering worry over the artificial-intelligence boom amid elevated bond yields worldwide. "Concerns over AI-related investment and credit risks persist," Commerzbank Research analysts say in a research report. French government bond yields climbed on Monday as "violent protests in France over the weekend heightened concerns about the government's ability to address its fiscal deficit," the analysts say. Among worst performers on Japan's benchmark index, Fujikura falls 3.4%, SoftBank Group drops 3.3%, and Resona Holdings sheds 2.7%. The dollar is at 158.51 yen versus Y158.10 around Monday's Tokyo market close. (ronnie.harui@wsj.com)
0011 GMT - Navigator Global Investments' September-quarter performance looks mixed to its bull at Morgans. Analyst Richard Coles likes the 9% growth in group ownership-adjusted assets under management, which was led by the Australian alternative-asset manager's strategic portfolio. Less positive was a slowdown in net flows at its Lighthouse portfolio, with flows mostly into lower-margin managed accounts. These Lighthouse net flows were largely offset by negative performance, he adds in a note. On balance, he says Navigator remains well positioned to benefit from structural tailwinds in global alternative asset markets. Morgans keeps a buy rating on the stock and a target price of 3.04 Australian dollars. Shares are up 0.2% at A$2.095.
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